Since the advent of charge cards, the incidents of credit purchases by consumers of goods and services has expanded at an astonishing rate. This expansion has resulted both from the increase in number of entities issuing charge cards and from the increase in the number of merchants accepting charge card purchases for goods and services. As used herein, the term "charge card" broadly means any type of merchant financial or bank card used to purchase goods and/or services against credit and charge accounts of a customer against debit accounts of a customer to existing accounts against other accounts and fund transfer systems.
The present invention on one hand may thus be used with, for example, "universal charge cards" that are accepted by a variety of merchants of different goods or services. Examples of these universal charge card systems are Master Card, Visa, American Express, Diner's Club, to name a few. In these systems, the holder of a member card typically has an established credit limit so that purchases may be made utilizing the card up to the established limit. Charges against the card holders credit account are accumulated on a periodic basis and the card holder is billed either for a portion of the credit purchases or for the entire amount. Should the credit limit be reached by the card holder at any time during the billing cycle, additional charges are not permitted on the respective charge card. Further, the institutions administering the charge cards may charge the card holder an annual administration fee as well as interest on the credit purchases. Also, the administering institutions often charge merchant members who accept credit purchases against the card holder's credit accounts, a transaction fee equal to a percentage of the charged amount. On the other hand, "special charge cards" may be those which large businesses or merchants, such as department stores, retail chains and the like, produce for use by customers at particular stores or for use with affiliated entities. These charge cards usually have only limited acceptance at the issuing institution and typically may not be used for purchases at non-affiliated businesses. In addition to the above-referenced charge cards, there are additional cards known as "debit cards." The holder of a debit card may purchase goods and services with such cards. However, rather than the purchase being considered a purchase on credit, for which the card holder may pay an interest charge, the debit card creates a direct debit into an account, such as a checking or savings account, maintained by the card holder. While technically debit cards operate differently from credit or charge cards, for purposes of the description herein, it should be appreciated that debit cards may be broadly included within the class of credit or charge cards. It should be understood that the present invention applies not only to universal charge cards, but also to special charge cards, debit cards and any other credit or deposit system used to pay for goods and services.
Even though the industry of financial transactions has experienced rapid growth in the use of charge cards, it has been recognized that, at least for the United States, the biggest growth in the volume of transactions will not come from signing new card holders, but rather will come from signing new outlets as merchant members to existing charge card systems. Of particular interest as a target market for new merchant members are fast-food retailers, movie theaters and other businesses which have heretofore avoided implementing systems of credit purchases due to the time and labor intensive process of conducting the charge card transaction event.
More particularly, in business such as fast food restaurants, theaters and the like, the linchpin of success is the ability of rapid throughput of customer transactions. Thus, for example, where a customer places his/her food selections in fast-food restaurants, many fast-food outlets desire that the transaction event be completed in less than one minute. Prior to the invention of the present system, these fast-food outlets have found that the interval of time necessary to execute a transaction event with a charge far exceeds the throughput interval. The reason for delay is that a charge transaction has required the creation of a physical charge voucher for the amount of purchase, the signing of the charge voucher by the card holder and the entry of the transaction all at the point of purchase station.
In recent times, the typical length of a credit transaction has even increased due to a desire both by the administering institutions and by the merchant members to validate the charge transaction prior to accepting the same. To this end, various charge approval institutions, which may be referred to as "host institutions" have been created as clearing houses for charge card credit transactions. Here, a host institution administers a family of charge cards; merchant members who accept those charge cards may affiliate with the host institution. When a charge transaction is proposed by a customer of the merchant member, the merchant member ordinarily creates the necessary transaction data to arrive at a transaction charge and then interrogates the host institution to obtain an approval or disapproval of the transaction amount. If the transaction amount if approved, the transaction is executed; if the transaction is disapproved, it is not executed. This procedure takes place at the point of purchase station, such as the cash register.
The host institution maintains credit limit files for the member card holders, and the respective host institution will review a card holder's available credit before issuing an approval for the transaction. If the transaction is approved, the host institution deducts the transaction amount from the card holder's account file to reduce the available credit limit. One of the services provided by the host institution is that, where a hard copy credit voucher is issued and that transaction is approved, the host institution guarantees payment to the merchant member of the approved amount. The host institution may also periodically transfer funds to the merchant member equal to the accumulated approved transactions processed by the respective merchant member.
While many attempts have been made at creating credit card systems that may be readily implemented by fast-food outlets and other high throughput merchants, until the present invention, there has not been a system found suitable for use by such merchants. Thus, there is present a tremendous need and a tremendous potential market for an apparatus, system and method which will allow these outlets to accept credit purchases without destroying high throughput rate.